Thread by @tkdotventures

2021 LAYER-1 ECOSYSTEMS

A challenging and transformative year for crypto with the rise of diverse sectors across blockchain space, named as Layer-1, Scaling Solution NFT, P2E, Cross-Chain, and the dawn of Decentralized Derivatives

Let’s take a look at the big picture🔥
#crypto

Valuing layer-1 coins like other tokens in the market or even CF concept actually not that wise choice. Considering layer-1 as a country, its coin should be valued as a national currency. To judge whether its implied power is strong or not, the coin price is merely a minor factor

The names mentioned here are ETH, BSC, Matic (polygon), Solana, Near, Fantom, Luna, and Avax which respectively achieved an impressive ATH over the past year. The article divide into 2 parts, the first briefly cover L1's journey in 2021 while the latter part will dive into DeFi.

1. Ethereum - True King

Related to technology, ETH development seems to be conservative compared to others, the most remarkable event las year was EIP-1559, a deflationary mechanism, which constructed the firm foundation for ETH to accelerate the process toward ETH 2.0, POS.

Despite the complaints about gas fees, speeds, ETH has consistently expressed the impressive results through on-chain metrics & DeFi activities. Ethereum laid the first stone in the whole ERC-721, NFT era, starting with Cryptopunk, BAYC and Adventures Gold, recently Loots.

Furthermore, kicking-off from Etherum, the Axie Infinity craze has started. By the action, people around the world are aware of the potential of the P2E model while the impact of P2E on the crypto community actually provides an upper salary-based for Philippines people to earn.

Dapps and projects in Ethereum are still leading in all areas of Defi, Game, NFT, Oracle, Infrastructure, etc.. In particular, 2021 also witnessed arrays of innovative DeFi products in the space like Tokemak, OlympusDAO, Lido Finance  or the rise of DAO like Constitution DAO

2. Binance smart chain (BSC)

It will be weird skipping the dark horse (BSC). In Q2 2021, BSC developed impressively in which all indicators up to BNB are bullish. Regarding the technology, BSC has no new updates other than the BEP-95 - a new efficient burning mechanism.

Binance NFT Market becomes one of the world's largest centralized NFT exchanges, competing directly with OpenSea. With the advantage of cheap gas fees & fast txn speed, BSC has attracted various bluechip DeFi & P2E projects to its ecosystem. Throughout the year, BSC acts a leader

.. of the market with great endeavors to organize arrays of activities to accelerate the space: MVB, Binance Charity, $1B Incentive Fund, Fan token & more. More and more quality Dapps have been deployed over the years which can be mentioned such as Cake, Venus, Tranchess, Beefy.

3. Solana

Solana is an ecosystem using Monolithic Scaling (there is only one SOL as the unique token of the platform) while advancing Rust as its own programming language which is completely different to Ethereum’s. Unlike other chains, Solana did not have EVM compatibility.

Solana is having outstanding growth because of cheap gas fees & UX-UI oriented. A series of Dapps released in Q3/2020 led to spike in all ecosystem metrics while surprisingly, scams or hacked projects didn't occur in Solana. Confronting from other aspect, it is seem slowing down

No Dapps or projects have been successful beyond expectations in Solana yet since TVL in Solana is all lagging behind other ecosystems. Same for gaming sectors, they haven’t been ready to launch on mainnet while Star Atlast is the most anticipated game toward the crypto space.

4. Matic (polygon)

Beside the well-known scaling solution as plasma, roll-up, Matic utilized sidechain technology (known as a Commit-Chain) with an array of additional features upon the main security layer of ethereum.

Matic had impressive growth in Q2 following BSC's growth, but it appears to be due to prominent Dapps on Ethereum.

Due to the advantage of being fast & cheap, there are a number of P2E games that are starting to develop on the Polygon network like Pegaxy, Chumbi Valley.

5. Terra

Terra has made an excellent move in its transition to stablecoins. This is the main feature of Terra protocol (a token pegged in accordance with the price of a stable currency following seigniorage & contraction).

The mechanism helps Luna's supply narrower when the user demands high, and Luna's price is not affected much when the market fluctuates.Terra's UST is the most stable coin during the market's 2021 swings.

However, Terra ecosystem is not diverse - only a few key products occupy the entire ecosystem such as Anchor, Mirror which might pose a centralized concern to users.

6. Avax

Avalanche subnet structure offers more flexibility in terms of usage and scalability while the EVM compatibility C-chain makes it easier for users from Etherum to join Avax.

In the early days of using Avalanche's X-Chain, users found it pretty difficult to transfer funds, causing the UX constraint. But now, under the mass adoption of C-Chain, fund transfer has brought everyone a much easier and better experience.

In Q3 2021, Avalanche Foundation announced its $180M Incentive program and since then, has brought AVAX to ATH. There are many successful Dapps on Avalanche such as Tradejoe, Avalaunch, Crabada, Imperium Empires  and Wonderland (TIME).

7. Near

Possessing strong technology and infrastructure, Near has signaled a strong return to the track by the end of Q4 2021. Near price has continuously surpassed ATH while ecosystems were still far from ATH after May 2021.

Near's Octopus multi-chain network is highly secure, enabling multi-thread interoperability for Substrate appchains. Accompanying the bull run effect from Near, Octopus also generated ATH continuously.

Aurora (Near's EVM) announced a partnership with C98 which allows users using the C98 Wallet to participate inAurora ecosystem while users are able to use MultiChain to bridge assets to use Dapps on Aurora. There aren't many Dapps operated in Near other than REF & Metapool

8. Fantom

Fantom had a strong growth momentum due to the announcement of a $370M incentive program with a series of accompanying events at the Fantom Developer Conference.

In early 2022, Fantom grew strongly & surpassed Avalanche in Daily Txns when yield at Fantom brought higher profits than the general level of peers. Andre& Daniele have announced that they will collaborate to launch a new project capturing Fantom's DeFi following the ve(3,3).

Dapps and projects on Fantom all have good growth such as Spooky, Scream where the Geist platform for Lending and Borrowing in Fantom has reached $40M platform fees.

Conclusion: Through the layer-1 journey in the past year, the development as well as the money flow throughout chains has been observed in the order of articles 1-8. According to the writer's personal assessment, these are the 8 most successful ecosystems in the past year.

And not forget to mention, there are other incredibles names such as Cosmos, Harmony, Algorand, Elrond, Celo, etc. Let's see what’s coming in 2022.